Sprouts Farmers Market LLC (SFM)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 350,231 | 358,360 | 334,076 | 391,665 | 217,360 |
| Interest expense | US$ in thousands | 12,631 | 9,047 | 11,684 | 14,787 | 21,192 |
| Interest coverage | 27.73 | 39.61 | 28.59 | 26.49 | 10.26 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $350,231K ÷ $12,631K
= 27.73
Based on the data provided, the interest coverage ratio for Sprouts Farmers Market Inc has shown a steady improvement over the past five years. The ratio has consistently increased from 10.60 in 2019 to 60.01 in 2023. This indicates that the company's ability to cover its interest expenses with its earnings has significantly strengthened.
The higher interest coverage ratio in 2023 suggests that Sprouts Farmers Market Inc has a more comfortable cushion to meet its interest obligations using its operating profits. This improved financial health is a positive sign for investors and creditors, as it indicates that the company is more stable and less likely to default on its debt payments.
Overall, the trend of increasing interest coverage ratios reflects the company's improved financial performance and indicates a healthier financial position for Sprouts Farmers Market Inc.
Peer comparison
Dec 31, 2023